NOR; Why deduct reimbursable AND non-reimbursable expenses?

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Jennifer Hicks

April 20, 2024 18:26

It seems multiple sources are stating that the Net Operating Revenue "represents the net dollars remaining after deducting the invoiced consultant's fees and expenses; AND all non-reimbursable AND reimbursable project-related expenses." AHPP pg 410 

My question is, by definition reimbursables are in fact paid back to the firm (with a mark-up for profit even) why are they deducted from the revenue? 

Thank you so much!

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  Jennifer Hicks April 20, 2024 19:52

  Received my answer - thank you AmberBook! 
  
  The markup [on reimburseables] isn't really for profit, it's just to cover the administrative expenses associated with the activity.  There are minor accounting expenses associated with moving those reimbursable expenses around.
  
  That would be why you wouldn't want to include reimbursables in your revenue, while technically you're getting paid back for those copies you made, or fuel you used to get to the job site, the monies you're receiving plus a 10% markup, (or whatever that percentage might be) is really a small amount towards the effort accounting puts in to track those.

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  Eugene O'Callaghan April 21, 2024 13:45

  The reimursables are both on the invoice (with 10% markup) and then deducted, so it essentially cancels out. Think of it as cash accounting - fee and reimbursables +10% come into your account, list from AHPP goes out.

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